2014 Drake Report

Michigan has been on a tax cutting spree since 1994, slashing a cumulative $51 billion in taxes that would have been available to schools, law enforcement, health care and other public services, according to a new report taking a long view of state taxation policies.

The report, “Michigan’s Tax Policies: Wrong Turns on the Path to Prosperity” by Douglas C. Drake, former head of the state Treasury Department’s Office of Revenue and Tax Analysis and a top legislative tax committee aide, was commissioned by a number of education groups to examine the impact of Proposal A. It was expanded to take an in-depth look at tax policies in Michigan and nationally.

The tax cuts were sold as being the key to creating economic prosperity for the state; but, over that period, Michigan’s national rank in per capita income has tumbled from 18th to 35th and the state’s unemployment rate, aligned with the national average in 1994, last year was more than 25 percent above the national average, according to the report.

“We can see from Michigan’s results since 1994, or from national data going back to before the Great Depression, dramatic cuts in taxes do not increase prosperity as measured by the income of average citizens,” Drake said. “Michigan can learn from this data, or continue to ignore it, as it moves forward.”

The report was paid for by the American Federation of Teachers Michigan, Michigan Association of School Administrators, Michigan Association of School Boards, Michigan Association of Intermediate School Administrators, Middle Cities Education Association, Michigan Education Association and Michigan School Business Officials.